UK industry â??not secure enough for tax breaksâ??

UK industry â??not secure enough for tax breaksâ??

By Rob Crossley

November 1st 2010 at 10:54AM

Lib-Dem MP Tom Brake, whose party fully backed tax breaks, supports Coalition u-turn

Just days since David Cameron faced further questions over the government's decision to scrap game tax breaks, two MPs have appeared on live TV quarrelling on the divisive issue.

The Tories’ decision to abolish the planned game tax breaks is putting jobs at risk, said Labour shadow minister Gareth Thomas in an interview broadcast on the BBC Politics Show

Yet Lib-Dem MP Tom Brake retorted with claims that the UK industry is not provably secure enough to be granted the measures.

“The Government [has to be] well placed to pick winners,” Brake said, before questioning the strength of the sector.

“In the game industry, we've just seen Realtime Worlds in Scotland - responsible for Grand Theft Auto [sic] - has gone out of business... We need to make sure the infrastructure is strong [before investing in a sector],” he added, as quoted by CVG.

Yet Thomas, Labour minister at the Department for International Development, said “a whole series of British jobs” have been created by the games industry in the UK.

Labour introduced game development tax breaks in its final budget before the elections. The Coalition Government eventually scrapped the policy.

Thomas believes the decision to axe tax breaks puts a "question mark that jobs created can now be maintained".

Yet Brake painted Labour’s plan as “another spending commitment made by Labour that was uncosted”.

During a Commons session last week David Cameron said tax breaks were scrapped as part of a difficult series of decisions the government had to take.

“I think that tax break relief, which was not particularly successful or targeted, had to go,” he said.

Before the election there were rumours that George Osborne, then the Shadow Chancellor, had pulled the plug on tax breaks after no promise was made in the Conservatives’ pre-election Manifesto.

A Develop report backing the claims was vehemently refuted by Culture Minister Ed Vaizey, who promised his party would introduce tax breaks “no ifs, no buts.”

[Source: CVG]